Channel News Asia: US, India to address trade disagreements

Channel News Asia: US, India to address trade disagreements
September 27, 2013
By: Nick Harper

Ties between the US and India hit a high watermark back in 2008 when the two signed a civil nuclear energy deal.

Since then, many analysts said the relationship has drifted – in particular for businesses which say links between the two nations haven’t borne fruit.

As India’s Prime Minister Manmohan Singh heads to the White House for his third summit with Barack Obama in four years, America’s National Association of Manufacturers wants Mr Singh’s visit to refocus attention on the problems surrounding trade between the US and India.

Mr Singh’s second official visit to Washington reflects the high level exchanges between the two nations have now become routine.

However, many experts said that unlike other meetings, Mr Singh’s latest visit to Washington won’t necessarily generate much positive momentum mainly because the talks are likely to focus on some key sticking points in the economic relationship.

In both New York and Washington, Mr Singh is being greeted with increasing discontentment from the America’s National Association of Manufacturers.

They claim Indian government agencies and courts aren’t playing fair because the market in areas like infocomm technology, clean energy and electronics are supplied only by Indian firms.

Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers, said: “India has adopted an industrial policy that’s all about growing their jobs and their manufacturing at the expense of ours and everyone else’s.

“We’re hoping that when President Obama meets Prime Minister Singh, he will ask the Indian government to reverse course and to adopt a fair trade policy with the US. We are really counting on the President to make this a priority in these discussions.”

However, Persis Khambatta, Fellow with the Wadhwani Chair in US-India Policy Studies at the Centre for Strategic and International Studies, said Indian manufacturers in the sectors affected, like electronics, are just trying to develop their own national industries.

“The Indians feel as though electronics imports are their second highest import bill, after oil and energy, as they feel this is an unsustainable way to go forward with manufacturing and electronics in the near future so they enacted a policy which says by certain points in time, you need to be producing these products locally, in India,” said Khambatta.

As India’s economy suffers its worst economic slowdown since 1991, disagreements over manufacturing won’t be the only concern about the Indian business environment raised by Obama.

He is also likely to show his unease about restrictive rules on procurement and a lack of protection for US intellectual property.

Obama is like to express concern about possible US immigration reform, which could make it harder for technology companies to bring skilled Indian workers to the US.

Both leaders will be looking to scotch any rumours that the relationship between the world’s oldest and largest democracies is growing in any way sluggish.

They will be highlighting the progress that’s been made but given the dissatisfaction on both sides over trade and investment, they will also have to acknowledge there’s still a long way to go.

Read More: